The pound hit a three month high against the euro on Wednesday as the markets reacted to the release of minutes from the last meeting of the Bank of England's monetary policy committee (MPC) on June 7th.

Sterling rose sharply in the early hours and peaked at 0.6727, its strongest trading against the euro since March.

The pound was also up against the dollar, reaching a two-week high and just falling short of returning to 2.0000 when European trading closed with sterling at 1.9945 against the dollar.

Yesterday, the minutes of the MPC meeting revealed that the committee was split 5-4 on whether to raise the UK base rate again.

As the vote was narrower than expected - and one of the four who voted for an increase was Bank of England governor Mervyn King - the markets are now expecting the British base rate to go up to 5.75 per cent in July.

On Thursday, traders in the US dollar will be interested in the release of the Philadelphia Fed Index.